US close: Markets in the red after Trump's travel ban
Following President Donald Trump’s travel ban for arrivals from seven predominantly Muslim countries, US equity markets were on the back foot on Monday as the Dow slipped past the 20,000 mark, the milestone it passed just last week.
Investors were also looking ahead to a busy week that includes a Federal Reserve rate decision and non-farm payrolls.
The Dow Jones Industrial Average fell 0.61% to 19,971.13, the S&P 500 was down 0.6% to 2,280.90 and the Nasdaq 100 shaved off 0.75% to 5,129.33 at the close.
On Friday, Trump put a 120-day hold on allowing refugees into the country, an indefinite ban on any refugees from Syria and a 90-day ban on citizens from Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen.
The ban also applies to anyone with dual nationality including any of those countries.
Alphabet’s Google, Facebook, and Microsoft were among the companies who criticised Trump’s temporary ban on immigration, and the Nasdaq was at lowest since September during Monday’s session with tumbling technology stock.
Alphabet said it was setting up a $2m crisis fund to donate to the UNHCR, International Rescue Committee and Legal Resource Centre, and Uber has said it will donate $3m to the American Civil Liberties Union along with $1m from Lyft.
Michael Hewson, chief market analyst at CMC Markets, said US markets opened lower taking the lead from weak European markets as investors wake up to the downside of what a Trump presidency might mean for risky assets.
“The weekend executive order to implement more stringent vetting procedures to visitors to the US from specific destinations, as well as a wider travel ban, could well be the beginning of this realisation, as investors shed their goldilocks blinkers.
“While the US has rowed back somewhat on the scope of the ban, with respect to green card holders the new policy has elicited a fierce backlash from US businesses with a number of US CEO’s coming out strongly against the policy, as concerns rise that this could well be the start of wider changes to the US immigration and visa system.
“It is perhaps no surprise that the tech sector has been the most vocal given that its highly skilled workforce has a higher proportion of overseas workers due to the higher skill set required, and their use of the H1-B visa system which is widely used by US companies to plug these skills gap.”
Meanwhile, oil prices retreated, with West Texas Intermediate off 1.08% to $52.60 and Brent crude down 0.58% to $55.20 per barrel.
On the data front, US personal spending increased 0.5% in December to $63.1bn, as expected, following a 0.2% gain in November, while personal income rose 0.3% to $50.2bn, compared to estimates for a 0.4% increase and following zero growth the previous month.
However, the preliminary estimate for November was revised up to show a gain of 0.1% on the month instead of an unchanged reading.
US pending home sales rose more than expected in December, according to data from the National Association of Realtors.
The NAR’s monthly index rose 1.6% to 109.0 from 107.3 in November and is now 0.3% above last December’s 108.7.
Economists had been expecting the index to rise a more modest 1.1%.
In corporate news, Delta Air Lines fell 4.08% after the company said domestic flights will resuming following a computer glitch that caused cancellations on Sunday and due to Trump's travel ban, as American Airlines also tumbled 4.37%.
Fitbit dropped 15.95% as the company announced it is to layoff employees.
Tempur Sealy tanked 28.01% after Mattress Firm cancelled its contracts with the company.
Looking ahead, Apple is slated to report on Tuesday, with Facebook numbers on Wednesday and Amazon the day after.
The two-day Fed policy meeting kicks off on Tuesday, with the rate announcement on Wednesday, while the all-important non-farm payrolls report is on Friday.
Fed chair Janet Yellen will testify before the Senate’s banking panel on 14 February, her first appearance since the central bank hiked rates in December.
Dow Jones - Risers
Walt Disney Co. (DIS) $110.94 1.50%
Wal-Mart Stores Inc. (WMT) $66.41 1.16%
American Express Co. (AXP) $77.27 0.56%
McDonald's Corp. (MCD) $123.02 0.13%
Home Depot Inc. (HD) $138.43 0.10%
Procter & Gamble Co. (PG) $86.74 0.03%
Visa Inc. (V) $83.69 -0.08%
General Electric Co. (GE) $29.95 -0.17%
Coca-Cola Co. (KO) $41.37 -0.17%
Nike Inc. (NKE) $53.08 -0.21%
Dow Jones - Fallers
Caterpillar Inc. (CAT) $96.79 -2.22%
E.I. du Pont de Nemours and Co. (DD) $76.00 -2.19%
Chevron Corp. (CVX) $111.82 -1.73%
Intel Corp. (INTC) $37.42 -1.47%
Goldman Sachs Group Inc. (GS) $233.90 -1.29%
Boeing Co. (BA) $165.52 -1.27%
3M Co. (MMM) $175.42 -1.16%
JP Morgan Chase & Co. (JPM) $86.02 -1.04%
Microsoft Corp. (MSFT) $65.13 -0.99%
International Business Machines Corp. (IBM) $175.77 -0.85%
S&P 500 - Risers
Affiliated Mgrs Group (AMG) $151.32 4.76%
Alliance Data Systems Corp. (ADS) $228.18 2.62%
Dollar General Corp (DG) $72.00 2.40%
Whirlpool Corp. (WHR) $174.91 2.38%
Legg Mason Inc. (LM) $32.09 2.30%
PVH Corp. (PVH) $92.28 2.19%
Nordstrom Inc. (JWN) $43.70 2.03%
Bristol-Myers Squibb (BMY) $48.69 1.99%
Hanesbrands Inc. (HBI) $23.33 1.97%
Kohls Corp. (KSS) $39.71 1.82%
S&P 500 - Fallers
Varian Medical Systems Inc. (VAR) $77.68 -12.52%
Transocean Ltd. (RIG) $13.85 -7.05%
Chesapeake Energy Corp. (CHK) $6.46 -6.65%
Range Resources Corp. (RRC) $33.34 -6.64%
Diamond Offshore Drilling Inc. (DO) $16.16 -6.54%
Cabot Oil & Gas Corp. (COG) $21.26 -5.72%
FMC Technologies Inc. (FTI) $33.30 -5.67%
Murphy Oil Corp. (MUR) $28.41 -5.24%
Marathon
Nasdaq 100 - Risers
Dollar Tree Inc (DLTR) $75.25 1.62%
Vodafone Group Plc ADS (VOD) $24.90 1.30%
Viacom Inc. Class B (VIAB) $42.46 1.17%
Skyworks Solutions Inc. (SWKS) $92.99 1.07%
Xilinx Inc. (XLNX) $59.10 1.04%
Citrix Systems Inc. (CTXS) $91.13 0.96%
Hasbro Inc (HAS) $83.37 0.94%
Seagate Technology Plc (STX) $44.90 0.90%
Micron Technology Inc. (MU) $24.18 0.88%
Electronic Arts Inc. (EA) $83.84 0.82%
Nasdaq 100 - Fallers
Cognizant Technology Solutions Corp. (CTSH) $53.66 -4.40%
American Airlines Group (AAL) $44.90 -4.37%
Vertex Pharmaceuticals Inc. (VRTX) $84.38 -3.42%
Incyte Corp. (INCY) $118.23 -2.87%
Alphabet Inc. Class C (GOOG) $802.32 -2.55%
Alphabet Inc. Class A (GOOGL) $823.83 -2.51%
T-Mobile Us, Inc. (TMUS) $61.13 -2.07%
Norwegian Cruise Line Holdings Ltd. - Ordinary Shares (NCLH) $48.03 -2.02%
Applied Materials Inc. (AMAT) $34.34 -2.00%
Liberty Global Plc Lilac Class C (LILAK) $22.40 -1.93%
Oil Corp. (MRO) $16.53 -5.05%
Tenet Healthcare Corp. (THC) $17.39 -4.98%